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Anzhela Knyazeva 


Anzhela Knyazeva is a Senior Financial Economist in the Division of Economic and Risk Analysis at the SEC. Her research areas are corporate finance and banking. Her research has examined boards of directors, payout policy and financing decisions, acquisitions, bank lending, institutional investors, labor markets, and international finance. Her work is published in the Journal of Financial Economics, Review of Financial Studies, and Journal of Corporate Finance, among others. Her policy expertise is in the areas of registered and unregistered securities offerings and disclosure requirements. 

Prior to joining the SEC, she was on the finance faculty at the University of Rochester's Simon School of Business, where she taught International Economics & Finance and Investments classes in the MBA and Master's programs and served as the Faculty Director of the Full-Time MS in Finance program.

She is the recipient of SEC Law & Policy Honorary Award, SEC DERA Director's Award, Special Act awards for economic analysis in rulemaking and economic research, Simon School of Business Superior Teaching Awards, Simon School of Business Teaching Honor Rolls, and Stern School of Business PhD Teaching Excellence Award.

She holds a PhD in Economics from New York University's Stern School of Business and Master's in International Policy Studies from Stanford University.

E-mail: anzhela.knyazeva at



Payout Policy, M&A, Financing Decisions, Corporate Governance, Banking, International Finance




[Google Scholar] [SSRN]


Employee rights and acquisitions (with K. John and D. Knyazeva), 2015, Journal of Financial Economics, 118(1), 4969.

"This paper examines the outcomes of corporate acquisitions from the perspective of stakeholder-shareholder agency conflicts. Using state variation in labor rights laws, we find that acquirers with strong labor rights experience lower announcement returns. The effect can be attributed to such acquirers pursuing deals that are not in the best interest of the acquirer’s shareholders. The negative effect of strong labor rights on acquirer returns and (combined acquirer and target announcement returns) remains after we control for a range of deal and target characteristics, consistent with employee-shareholder agency conflicts limiting shareholder gains and synergies from the acquisition."
discussion on the Harvard Law School blog


Governance and payout precommitment (with K. John and D. Knyazeva), 2015, Journal of Corporate Finance, 33, 101–117.

(previously circulated as "Payout policy, agency conflicts, and corporate governance" and "Corporate governance and payout commitments")

"We examine how firms structure payout and debt commitments to address governance weaknesses. Firms with severe agency conflicts precommit through a combination of dividends and debt or through dividends rather than debt alone. Such firms also shift their shareholder payouts towards regular quarterly dividends – a stronger commitment than special dividends or repurchases. Although dividend commitments are implicit, event study evidence supports their credibility and value-relevance for firms with weak governance. Despite harsher penalties, debt alone cannot replace shareholder payouts as a means of addressing managerial agency conflicts."


The supply of corporate directors and board independence (with D. Knyazeva and R. Masulis), 2013, Review of Financial Studies 26(6), 1561–1605.

(previously circulated as “Effects of local director markets on corporate boards” and “Local director talent and board composition”)

"Empirical evidence on the relations between board independence and board decisions and firm performance is generally confounded by serious endogeneity issues. We circumvent these endogeneity problems by demonstrating the strong impact of the local director labor market on board composition. Specifically, we show that proximity to larger pools of local director talent leads to more independent boards for all but the largest quartile of S&P 1500. Using local director pools as an instrument for board independence, we document that board independence has a positive effect on firm value and operating performance and the CEO fraction of incentive-based pay and turnover."

discussion on the Harvard Law School blog


Does geography matter? Firm location and corporate payout policy (with K. John and D. Knyazeva), 2011, Journal of Financial Economics 101(3), 533–551.

(previously circulated as "Do shareholders care about geography?")

"We investigate the impact of geography on agency costs and firm dividend policies. We argue that remote firm location increases the cost of shareholder oversight of managerial investment decisions. We hypothesize that remotely located firms facing free cash flow problems precommit to higher dividends to mitigate agency conflicts. We find that remotely located firms pay higher dividends. As expected, the effect of geography on dividends is most pronounced for firms with severe free cash flow problems. Further, remotely located firms rely more on regular dividends instead of special dividends or share repurchases and decrease dividends less often."


Does being your bank’s neighbor matter? (with D. Knyazeva), 2012, Journal of Banking and Finance 36(4), 1194–1209.

"This paper provides new evidence on the role of distance between banks and borrowers in bank lending. We argue that delegated monitors face higher costs of collecting information about nonlocal borrowers due to the difficulty of obtaining and verifying soft information over distances. Further, the higher information collection and monitoring costs associated with distance should be reflected in loan terms. Empirically, loan spreads are increasing in the distance between borrowers and lenders. Finally, banks are more likely to include covenant provisions or require collateral when lending to borrowers located far away."


Ownership change, institutional development, and performance (with D. Knyazeva and J.E. Stiglitz), 2013, Journal of Banking and Finance 37(7), 2605–2627.

"This paper conducts a cross-country empirical study of the impact of institutions and agency conflicts on ownership reforms and their implications for changes in performance and efficiency. We examine two main questions. First, we evaluate the effects of certain property rights and institutional quality measures on performance and efficiency. We find that property rights and contracting rights protections contribute to stronger post-privatization performance. Second, we ask whether sectors undergoing changes from state to private ownership exhibit better or worse performance than sectors remaining public. We find an insignificant effect of privatization in ordinary least squares estimates and a negative short-term effect after correcting for endogeneity of privatization decisions that disappears in the long run, consistent with recently privatized enterprises facing short-run costs of restructuring and the challenges of mitigating agency and expropriation concerns."

Discussion of the paper in the CFA Digest  2013, Vol. 23, Issue 3


Product market competition and shareholder rights: international evidence (with D. Knyazeva), 2012, European Financial Management 18(4), 663–694.

"This paper examines the interaction between product market competition and international differences in shareholder rights in relation to firm performance and corporate policies. In contrast to existing literature, we provide evidence of complementarities between product market competition and country shareholder rights protections. The benefits of shareholder rights protections for firm performance are conditional on the presence of a competitive industry environment. We find that stronger shareholder rights protections are associated with better firm performance in competitive industries. However, this relation is not significant in concentrated industries. Consistent results are obtained from the analysis of key corporate policies."

Ownership changes and access to external financing (with D. Knyazeva and J.E. Stiglitz), 2009, Journal of Banking and Finance 33(10), 1804–1816.

"This paper examines access to external financing in the privatization context and provides new evidence on the effects of financing constraints on performance and investment. Ownership reforms increase firms’ reliance on external financing. Empirically, performance and investment changes around ownership reforms are increasing in country-level measures of access to credit. The presence of a severe prior public financing constraint contributes to stronger investment growth after privatization. Privatized enterprises do not outperform publicly owned industries, all else given. Our analyses rely on new international sector- and firm-level data and correct for potential endogeneity of ownership changes."


Crises and contagion: A survey (with D. Knyazeva and J.E. Stiglitz), 2012, In Lucey, B., Larkin, C. (Eds.): What if Ireland Defaults? Orpen Press. 

Adaptation published in Europe on the Brink; Debt Crisis and Dissent in the European Periphery, 2014, Phillips, T. (Ed.), Zed Books; A Europa à Beira do Abismo, 2014, Phillips, T. (Ed.), Bertrand; Bajo el Yugo Neoliberal: Crisis de la Deuda y Disidencias en las Periferias Europeas, 2016, Phillips, T. (Ed.), Akal.


Dissimilar directors on corporate boards (with D. Knyazeva and C. Raheja), working paper.

(previously circulated as "The benefits of focus vs. heterogeneity: An analysis of corporate boards")
"We investigate the implications of dispersion in individual director characteristics within a corporate board for shareholder value. The presence of directors with dissimilar skill sets can augment the board’s overall information set and increase the flexibility and effectiveness of the board’s decision making. At the same time, greater differences in director characteristics within a board can raise coordination costs and adversely affect board functions. We find a negative relation between dispersion in director characteristics and firm value. To address causality concerns, we exploit external constraints which prompt firms to deviate from the optimal level of board dispersion. We also conduct an event study of M&A announcements and examine market reaction to changes in dispersion as a result of director appointments, departures and deaths. Firms with higher levels of board dispersion experience an adverse market reaction to acquisition announcements. Growth firms experience a negative market reaction to increases in board dispersion. Further tests reveal significant effects of board dispersion on executive compensation and other value relevant firm decisions."


Investor heterogeneity and trading (with D. Knyazeva and L. Kostovetsky), working paper.

"This paper provides new evidence on the role of investor heterogeneity for the firm’s information environment. We empirically examine the effects of heterogeneity in the characteristics of the firm’s shareholders on the volume and price movements around corporate announcements. We formulate several new measures of heterogeneity in the ability of institutional investors to gather and process information about the firm based on differences in institutional investor size, experience, holding history, and local exposure. We find that differential precision in investor information is positively related to trading volume around earnings announcements. In addition, greater investor heterogeneity is positively related to the magnitude of price reaction."


Dividend smoothing: an agency explanation and new evidence (with D. Knyazeva), working paper.

"In spite of considerable research into firm dividend behavior, dividend smoothing has eluded a definitive explanation. This paper provides an agency interpretation of dividend smoothing and offers evidence that variation in corporate governance and managerial incentive conflicts explains differences in intertemporal properties of dividends. We argue that smooth dividends are an alternative to traditional corporate governance mechanisms. Empirically, we document a greater degree of dividend smoothing, fewer dividend cuts, and a trend towards regular incremental dividend increases at firms with weak traditional monitoring mechanisms. The effect of governance on dividend changes is largest for firms with high free cash flow. We document consistent patterns for total shareholder payout and overall commitment to external claimholders. However, dividends and repurchases are not perfect substitutes and adjustments to repurchases are secondary to the weakly governed managers’ need to sustain dividends."

Financial innovation in microcap public offerings, working paper, 2017.

"Access to financing for small and growth companies characterized by high information asymmetries and financing constraints has long been an important question in corporate and entrepreneurial finance. This paper provides evidence on the role of a novel financing alternative available to entrepreneurial firms from a quasi-natural experiment involving 2015 amendments that significantly expanded Regulation A, a method of conducting a small direct public offering without registration under the Securities Act of 1933. Compared with traditional small public offerings, Regulation A draws a greater share of smaller, younger companies undertaking their first public offering of securities, typically without an intermediary, on a best efforts basis. Consistent with it, the market reacts less to information about the historical financial condition of such companies. Individual tiers of Regulation A fit into a revised pecking order of financing alternatives for private issuers going public. The 2015 shock expanded the use of Regulation A, with most of the increase accruing to market segments that had capital market access through other private or public financing methods. In particular, private placements and Regulation A public offerings exhibit a complementary relation, which becomes more pronounced after the 2015 shock. There is also some evidence to suggest that Regulation A public offerings may be a financing alternative for private issuers seeking public capital that are unable to conduct a traditional registered offering or unwilling to bear its costs. Consistent with different types of issuers pursuing Regulation A and small registered securities offerings, there is no evidence of significant substitution out of small registered offerings into Regulation A offerings after the shock."

Soft and hard information and signal extraction in securities crowdfunding (with V. Ivanov), working paper, 2017.

"We examine the impact of information flows on financing and the relative roles of hard information, soft information, and certification of issuer quality by third parties, using novel evidence from the US securities-based crowdfunding market. While hard information about the issuer’s financial condition and experience has only marginal relevance for offering outcomes, third-party certification of issuer quality as well as soft information about the issuer in the form of social media and crowdfunding platform communications plays a significant role in crowdfunding offerings. The relative roles of hard information and certification are greatest in offerings of more information-sensitive securities and when investors are less likely to derive nonpecuniary returns from participating in an offering. Further, there is evidence of partial substitution between different signals of issuer quality. Both third-party certification and issuer social media following are positively related to the valuation obtained by the issuer. Issuers tailor deal features, specifically, the choice of funding target flexibility and offering duration, to the level of information asymmetry about issuer quality. Finally, there is some evidence of geographic matching, with issuer characteristics and local availability of platforms affecting distance between issuers and platforms."

Creditor rights and aggregate factors in lending terms (with D. Knyazeva and J.E. Stiglitz), working paper.

"It is well known that conflicts of interests between borrowers and creditors can raise the cost of external financing. In this paper we provide new evidence that borrower-creditor conflicts of interests also affect the sensitivity of debt financing to aggregate business conditions. In the presence of incomplete contracts, creditors cannot fully observe or verify diversion of free cash flow by borrowers. Whereas strong creditor rights impose a high cost on defaulting borrowers, weak creditor rights enable borrowers to divert cash flows and avoid repayment more easily. When creditors cannot enforce their rights and assure repayment regardless of the individual borrower’s underlying financial condition, creditors may choose to rely more on verifiable, aggregate information in their lending decisions, resulting in less discriminate loan pricing. Alternatively, creditors with few protections may resort to more borrower-specific information gathering in an effort to select the best borrowers and mitigate conflicts of interest. We test these contrasting predictions in a sample of international and domestic syndicated bank loans. Based on our analysis of international and domestic syndicated bank loans and country- and state-level variation in creditor rights, we find that industry factors have a larger impact on loan spreads and other terms when creditor protections are weak. The findings demonstrate a new channel for the effect of conflicts of interest on bank lending and yield important implications for lenders, borrowers, efficiency of capital allocation, and systemic risk."


Firm complexity: the 'dark side' of geographic diversification (with D. Knyazeva), working paper, 2017.

"In this paper we analyze firm geographic complexity and its implications for credit risk using a unique new dataset with granular geographic segment information and credit quality scores. After accounting for determinants of geographic diversification, we find that geographically complex firms are characterized by significantly lower credit quality than their focused peers. Overall, greater geographic complexity increases credit risk, consistent with geographically disperse firms facing higher information and monitoring costs that may exacerbate information asymmetries and intra-firm capital allocation inefficiencies. The evidence is inconsistent with geographic diversification decreasing credit risk through diversification of cash flows. The identified effects are economically important for potential lenders. The results hold for firms of varying size and cannot be explained by business diversification or other firm, industry, and local area factors and firm fixed effects."


Comovement in investment (with D. Knyazeva, R. Morck, and B. Yeung), working paper, revised 2016.

"This paper examines comovement in investment decisions. Although stock return comovement and herding among investors have received considerable attention in existing work, little is known about correlated investment behavior of firms. All else equal, investments are expected to comove more when firms imitate other firms and rely on public information rather than on firm-specific private information about investment opportunities. We examine the determinants of comovement in investment after accounting for the similarity in firm fundamentals and industry structure, with a focus on the role of managerial power, corporate governance, and information asymmetries. We find a positive relation between managerial power and comovement in investment decisions and a negative relation between managerial incentives and comovement, consistent with the hypothesis about managerial underinvestment in information acquisition effort. We identify a range of other determinants of comovement, including the strength of managerial equity incentives, innovation intensity, asset structure, investment cycle length, comovement in fundamentals, and the overall level of volatility. In a cross-country setting, we find that comovement in investment is decreasing in shareholder rights protections and the strength of accounting and disclosure standards. Holding investor protections constant, we observe that comovement is correlated with lower investment efficiency."


Foreign issuers in emerging growth company IPOs

IPO underpricing: new evidence

Diversity in corporate teams

Intermediaries in private offerings


U.S. Securities-based Crowdfunding Under Title III of the JOBS Act, DERA White paper 2017

Regulation A+: What Do We Know So Far?, DERA White paper 2017